Restructuring May Help Local Asbestos Claimants

November 21, 1990|By DONALD LOEPP Staff Writer

NEWPORT NEWS — A plan to cut the size of settlements from the Manville Corp. trust to asbestos victims nationwide could actually be good news for local plaintiffs, according to a lawyer handling many of the plaintiffs' cases.

Although the restructuring could mean smaller settlements for many asbestos victims and their survivors, it may help clear the way for payments to more than 1,000 Hampton Roads victims who already have court-approved consent judgments, said the attorney, Donald N. Patten.

``Under the plan, our people are in a special category. They are going to be paid the full value of their judgments,'' said Patten, a member of Patten, Wornom & Watkins, one of two Hampton Roads firms that are handling most local claims.

Most of the local plaintiffs were exposed to asbestos in public and private shipyards, where use of the fire-retardant and insulation material was once widespread. Exposure has been linked to ailments including asbestosis, which scars a victim's lungs, and mesothelioma, a form of cancer.

About 1,000 Hampton Roads plaintiffs filed claims in U.S. District Court in Norfolk in January, and the cases were settled in the summer when Judge J. Calvitt Clarke Jr. issued consent judgments for damages totaling $60 million, Patten said.

After the judgments were approved, the Manville trust claimed that it did not have the money to pay all of its claims, and New York U.S. District Judge Jack B. Weinstein, who was presiding over cases involving former employees of the Brooklyn Navy Yard, issued a temporary freeze on all payments from the trust.

While the freeze has been in place, Manville had been working on a plan to restructure the trust it created in 1988, after it declared bankruptcy after being named in thousands of asbestos lawsuits.

Monday, the details of the new payment plan, agreed to by attorneys from both sides, were made public. Under the new plan, which requires Weinstein's approval, Manville will contribute up to $520 million to pay for claims, and asbestos victims will be compensated according to the severity of their illness.

According to the plan, claims by many victims who had less serious health problems may be reduced or paid out over an extended period of time, Patten said.

Victims with the most serious health problems will receive up to 45 percent of their judgment up front, and the balance after all other claims are partially met.

But because most claims by Hampton Roads victims have already been adjudicated and are now pending before the 2nd U.S. Circuit Court of Appeals in New York, Patten said their claims would not be reduced as a result of the reorganization. He added, however, that the reorganization plan would likely be appealed, and that the case was not yet closed.

In addition, any pending cases or cases not yet filed in Hampton Roads would be subject to the new compensation rules, he said.

``This is going to be a lengthy process. None of our people are going to be paid tomorrow,'' Patten said. He said his clients may be paid in installments rather than a lump sum, but predicted they would eventually have their claims paid in full.